Switching Car Insurance: 8 Important Time-Saving Tips

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March 2, 2014

There’s no escaping the need to carry car insurance: every state requires it. But sometimes the insurance you have isn’t right for you. It may cost too much, you may not be getting the proper discounts, the coverage may not be adequate.

While you may worry that it’s too much hassle and too difficult to switch to another insurer, it's not. Switching car insurance doesn’t have to be a chore, not if you follow these eight important, time-saving tips.

Don’t ignore potential savings. While you might think switching car insurance companies is too much of a hassle, you might be convinced by potential savings. Would you ignore money that was sitting on the table in front of you? Likely, you’d snap it up. So, the first rule of thumb is to get over thinking negatively and concentrate on what potential savings you can realize by switching car insurance.

Shop around. How do you know what you might be able to save unless you take the time to do your research? You simply have to shop around for the best rates. Since most auto insurance policies are written for six months or a year, the best times to start your research into what other companies may have to offer is when you buy a new or different vehicle, move, or one to two months before your current policy comes up for renewal.

Compare rates of companies in an apples-to-apples analysis. Granted, you can probably find ultra-cheap or much less expensive car insurance policies around, but in order to be right for your situation, you need to do an apples-to-apples comparison and analysis. If you need full replacement value in case of a collision, want certain discounts, only drive a minimum number of miles per year, look for coverage that provides for your needs. Comparing a policy for minimum coverage required by state law won’t do you any good if you have a finance contract that stipulates a higher level of coverage. And rates do vary from one company to another – even for the same type of coverage.

Check with your current insurer. This should be obvious, but it often isn’t. Before you make the decision to go with another auto insurance carrier, contact your current insurer to see if there’s a better deal they can offer you. It is in their best interest to retain you as a customer, so you do have a certain amount of leverage. Besides, there may be new offerings or discounts or package deals that you’re not aware of but can find out about in a conversation with your insurer. If you ultimately decide to switch, you want to make sure there aren’t any penalties you’ll be subject to by cancelling your current policy before the expiration of its coverage date.

Delve deeper into a new car insurer before you buy. The old adage of “buyer, beware” also applies to switching car insurance. Do a thorough investigation of the new company you’re thinking about switching to before making the change. Look into how many complaints the insurer has about claims. Most states have insurance offices that monitor the customer complaint ratios for carriers -- for example, the number of complaints for every $1 million of collected premiums. Complaints are usually filed as a result of dissatisfaction with the insurer’s claims process. What you want to know is the company you’re considering has customers that are satisfied with the company’s track record in handling claims. If the company has a high complaint ratio, your potential savings may not be worth it in the long run.

Don’t cancel current policy until you have proof of coverage in the new one. While this may also seem somewhat obvious, there are many instances where a few days make a big difference. You might think that you’re safe with a little gap in coverage – after all, you haven’t had an accident in years – it’s never good to take that chance. Accidents do happen, and they can occur when you least expect them. Rule of thumb: never cancel your current policy until you have proof of coverage from your new insurer.

Be sure to cancel your old policy. You also want to make sure that you do cancel your old policy once you obtain your new one. If not, you’ll be sent a bill for non-payment plus penalties. Contact your old insurance company on the phone or by mail and let them know you’re switching carriers. Follow up and ask for written confirmation of the cancellation. Taking this step is important to not only avoid continued bills and penalties, but also to protect your credit.

Do an annual auto insurance check-up. Consumers tend to get complacent about car insurance, figuring they have a good policy and don’t need to do anything more. Savvy consumers, on the other hand, recognize that it’s a good idea to do an annual auto insurance check-up. Your situation may have changed. You drive less or more, are going to be adding a teenage driver to your policy, intend to buy or sell a vehicle, move, qualify for different discounts, or are looking into bundling home-auto-life or other insurance coverage with the same company.